Individual personal tax relief is only available for individuals who are considered tax resident in Malaysia. No tax relief is available for non-tax residents. Generally rule is, a person is a Malaysia tax resident if he/she stays more than 180 days in Malaysia. There are some other rules a person can be qualified as tax resident in Malaysia.
Below is a glance of individual tax relief available for year of assessment (YA) 2010. Take a look below and see which of the relief you may able to spend before 31 Dec 2010 and claim tax relief in your tax return by 30 April 2011.
Personal tax relief and deductions for YA 2010 & YA 2011 are essentially the same, it is just the scope is expanded under Budget 2011, but the relief and deduction amounts are the same for both year 2010 & 2011.
|No||Type of individual tax relief – YA 2010 & YA 2011||Amount (RM)|
|1||Self and Dependent|
|2||Medical expenses for parents (scope extended from YA 2011, see Budget 2011 summary)|
|3||Basic supporting equipment|
|4||Disabled Individual (in addition to self relief above)|
|5||Education Fees (Individual)|
|6||Medical expenses for serious diseases|
|7||Complete medical examination|
Purchase of books, journals, magazines and publications
|9||Purchase of computer (once every 3 years)|
|10||Net saving in Skim Simpanan Pendidikan Nasional|
|11||Purchase of sport equipment for sport activities|
|12||Subscription fees for broadband registered in the name of the individual (from 2010 to 2012)|
|13||Income Tax Relief on Interest of Housing Loan (YA2010 only)|
Husband/Wife (for joint assessment) /Alimony Payments
|16||Ordinary child relief (regardless number of children)|
1,000 per child
|17||Child age 18 years old and above, not married and receiving full-time tertiary education|
|18||Child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities|
Additional relief of RM4,000 disable child age 18 years old and above, not married and pursuing diplomas or above qualification in Malaysia @ bachelor degree or above outside Malaysia in program and in Higher Education Institute that is accredited by related Government authorities
|20||EPF and life insurance (scope extended from YA 2011, see Budget 2011 summary)|
|21||Premium on new annuity scheme or additional premium paid on existing annuity scheme commencing payment from 01/01/2010 (amount exceeding RM1,000 can be claimed together with life insurance premium)|
|22||Insurance premium for education or medical benefit|
Under the self-assessment system for individual tax, you do not need to submit the relevant receipts or invoices to the tax authorities (IRB) for those relief expenses spent or incurred, but instead just keep those documents to yourself in case you may be selected by IRB for random tax audit or when you need tax clearance from IRB for previous years of assessment.
How long you need to keep those receipts or invoices for tax purposes? Tax rules require you to keep for 7 years. The calculation of the 7 year period begins from the end of the year in which the Income Tax Return Form is filed. Effectively, you need to keep it for 9 years. How to calculate to 9 years? You spent/incurred relief expense in Year 1, submit the Income Tax Return Form by 30 April in Year 2, and then keep the receipts pursuant to tax rules for 7 years. Total number of years is 1+1+7 = 9 years.
An individual with a chargeable income not exceeding RM35,000 entitle to a rebate of RM400 effective from year of assessment 2009. Where the wife is not working or the wife’s income is jointly assessed, she also enjoys a further rebate of RM400. Similarly, a wife who is assessed separately will also enjoy a RM400 rebate, provided her chargeable income does not exceed RM35,000.
Tax rebate is offset against tax payable calculated based the scale income tax rates, whereas tax relief is offset against gross income level before calculating the tax payable based on the scale income tax rates.
Taxable income RM28,000
Less: Tax relief (RM 8,000)
Chargeable income RM20,000
Calculated tax RM475
Less: Tax rebate (RM400)
Tax payable RM75
|Submit your Form B 2010 tax return by 30 June 2010|
|Personal Tax Rates for YA 2010|